SPR authorization, fossil fuel research in pending spending measure

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Jan. 27 -- Congress last week moved closer to completing a long-delayed federal budget for fiscal year 2003, with the US Senate passing a $390 billion appropriations bill Jan 23.

The House and Senate must now reconcile two different spending proposals and settle on a final "omnibus" bill that sets spending levels for most federal agencies through Sept. 30. So far it is unclear what, if anything, would provoke a White House veto.

Included in the bill are annual budgets for key agencies that regulate oil and gas companies, large and small. This includes the budgets for the departments of Interior and Energy, the Environmental Protection Agency, and operating funds for the Federal Energy Regulatory Commission and the Securities and Exchange Commission.

Senators considered more than 200 amendments to the measure, which combines 11 of the 13 annual appropriations bills that fund the federal government. Two military spending bills passed Congress and were signed into law last year.

Senators approved by voice vote a plan by Sen. Jeff Bingaman (D-NM) that gives the president permanent authority to draw down the Strategic Petroleum Reserve in case of an emergency. Congress typically reauthorizes the president's ability to use the SPR every 2 years, but a possible war with Iraq and the current supply woes from Venezuela justified giving the president permanent authority, bill sponsors said. The amendment also directs the Department of Energy to fill the reserve to capacity, even if Congress chooses to expand the stockpile beyond its current 700 million bbl limit. The proposal is expected to win support from the House and the White House.

Senators also approved by voice vote an amendment sponsored by Alaska Sens. Lisa Murkowski (R) and Ted Stevens (R) allowing the Department of the Interior to renew the right-of-way for the Trans-Alaska Pipeline without extensive environmental reviews.

Even with the new Republican majority, the Senate remains opposed to most offshore oil drilling as evidenced by two measures now in the bill. Mike DeWine and George Voinovich, both Republicans from Ohio, sponsored a largely symbolic measure that extends a 2-year ban on drilling in the Great Lakes. Similarly, Sen. Barbara Boxer (D-Calif.) won support for nonbinding language that calls on Interior not to spend staff resources related to the exploration or development of 36 disputed leases off California. The state wants the federal government to buy back the leases.

But that interest in supporting so-called "green" issues extended only so far. Senators narrowly defeated a measure by a 50-46 vote offered by Sen. John Edwards (D-NC). That measure sought to delay an EPA proposal that streamlines a permitting provision of the Clean Air Act called "new source review." NSR is supposed to ensure power generators and refiners do not create more industrial pollution when they expand operations.

Environmental groups, which oppose EPA's plan, said the close vote means there could be pressure on senators to consider the issue again.

Another pending clean air item already in the Senate bill would require EPA to submit a report no later than Feb. 15, 2004 "on the practices and procedures by which states develop separate emission standards, including standards for nonroad engines or vehicles, as compared to the development by EPA of national emission standards under the Clean Air Act."

Opponents of the language say the measure would require EPA to perform legal work that industries could use to attack state pollution control standards. Industry proponents say the study would help EPA be more efficient in its enforcement of clean air rules on a state-by state-basis.

Negotiations ahead
Key policy issues regarding environmental enforcement, research, and taxes still await further debate before a final bill is sent to the White House for approval.

Funding in the $390 billion Senate-passed package is subject to a 2.9% across-the-board cut in all domestic programs, a figure likely to be challenged during conference negotiations. Those negotiations could stretch out through next month depending on what the White House is willing to accept.

Meanwhile, the White House unveils a proposed 2004 budget Feb. 3. Bush administration officials said in mid-January that the new budget seeks to increase most domestic spending by 4%, an increase of less than half of what Congress is expected to pass for the 2003 budget. Both White House and congressional officials predict there could be serious cuts in some government programs in order to help pay for increased military spending and a proposed economic stimulus package that includes deep tax cuts ($674 billion over 10 years).

Oil and gas casualties
One casualty could be oil and gas research, some industry sources predicted. Even before budget deficits were considered a problem, this White House has historically proposed dramatic cuts in the Department of Energy's fossil fuel office.

This year, with oil prices at relatively high levels, there may not be as much political will in Congress to ignore the White House's wishes on the issue, congressional staff said.

Pending 2003 issues
Under consideration in the pending omnibus bill are a myriad of spending items that impact industry directly and indirectly. These include earmarks for federally funded oil and gas research programs, environmental protection enforcement, and money to process leasing applications. Funds to inventory the oil and gas potential of federal land may also be included.

Some producers also would like to see the "Section 29" tax credit renewed. That tax incentive began in 1980 to encourage unconventional oil and gas domestic production. The comprehensive energy bill that failed last year included an extension; it is uncertain whether the tax credit will be included in this bill.

Also typically in the annual federal budget are public policy mandates: Congress this year is again expected to impose a 1-year moratorium on most offshore drilling, for example.

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations


Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Court to EPA: Costs matter

07/06/2015 Oil and gas groups did not respond immediately when the US Supreme Court ruled on June 29 that the US Environmental Protection Agency acted unreaso...

Statoil installs subsea wet gas compressor at Gullfaks

07/06/2015 Statoil SA installed what it is calling the world’s first subsea wet gas compressor at its Gullfaks C platform offshore Norway. By compressing at t...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected